Milwaukee-based manufacturer Rockwell Automation is working to minimize any disruptions that could be caused by President Trump’s tariffs on imports from Canada and Mexico (25% tariffs that Trump early this month paused for 30 days).
The maker of industrial automation and digital transformation products on Monday reported a first quarter sales decrease of 8.4% compared to the first quarter of 2024. Despite lingering economic uncertainty, and Trump’s plans for tariffs, Rockwell leadership is expecting to see a gradual sales improvement.
“From a demand perspective, we are encouraged by better-than-expected order performance in the quarter with sequential growth across all regions and business segments,” said Blake Moret, chairman and CEO. “While there is still some macroeconomic and policy uncertainty weighing on customers’ capex plans, Rockwell won multi-million-dollar strategic orders across key industries, especially in the U.S., our home market.”
The cost of finished goods Rockwell imported from Mexico, Canada and China in 2024 represented less than 10% of the company’s U.S. revenue in 2024. Rockwell’s direct imports into the United States from Mexico was approximately $350 million in 2024 while imports from Canada and China were each approximately $100 million.
Rockwell, has implemented a “multi-faceted” tariff mitigation plan, said Christian Rothe, senior vice president and chief financial officer.
In the short term, the manufacturer has put in place price changes stemming from the additional China tariffs that were put in place on Feb. 4th. The company is also “making some changes” to its manufacturing locations if there is an “attractive return in investment.”
This involves alternative sourcing and movement of production locations. Production of some of Rockwell’s products will be shifted to different manufacturing sites due to the tariffs.
Rockwell has some products that are made in Mexico and later imported into the United States. For many of those same products, there are some production sites in the United States, however, the products made in the country are later shipped outside the United States.
Rockwell is moving production for non-U.S. customers outside the country to create capacity to manufacture production for U.S. customers inside the country.
“These actions are disruptive for our customers, of course, and there will likely be some noise in the near-term,” said Rothe. “We are working hard to minimize that disruption and ensure continued levels of customer service. With that said, due to our immediate actions and substantial U.S. manufacturing footprint, we do not expect these tariffs to have material impact on our profitability for the full year.”
Despite uncertainty caused by the tariffs, many of Rockwell’s customers are not changing their plans to invest in new buildings or automation projects.
“As we’ve talked to customers really around the world, but especially here in our home market, there is a general optimism,” said Moret. “There’s obviously remaining volatility which offsets a bit of that, but the general mood out there for the first time in a long time is a general optimism.”
